Global business relies on frameworks and rules. But the Trump Administration’s introduction of arbitrary tariffs on imports to the United States has caused plenty of uncertainty. How is Taiwan’s bicycle industry coping?
In late March, the pending announcement of import tariffs by the Trump Administration was a prime concern at Taipei Cycle. Three months later at Eurobike, the provisional tariffs were known but key players in global trade were trying to negotiate better deals before the August 1 deadline. China even got a 90-day reprieve on its 30% tariffs thanks to its control over rare earth elements and other commodities the United States needs. Meanwhile India got slapped with a hefty 50% tariff. But not all companies within the bicycle industry are equally reliant on the United States as a market and thus are not as exposed to these new tariffs.
Merida Industries does not sell its own brand into the U.S., as the company’s senior vice president and spokesman Daryl Chang explains. Thus, the impact of the tariffs is limited to its OE customers. Glory Wheel’s chairman Charles Lee states: “The impact of U.S. tariffs on our business is currently limited, as products directly exported to the United States account for only about 5-6% of our total shipment volume, resulting in minimal immediate effects.” One thing remains the same according to Velo Enterprise’s CEO Ann Chen: “Issues like tariffs are not something the bicycle industry can solve. We can only maintain close contact with our customers, hoping to minimize the impact on international business.”
The exact tariffs to be levied are still subject to bilateral negotiations even beyond the August 1 deadline. For this reason, Sram Asia’s general manager Bob Chen says his company still needs more time to evaluate the real-world impact. This uncertainty causes additional issues as Tern’s Team Captain Josh Hon explains: “The U.S. tariffs are a serious headache because at the moment nobody knows how to calculate them. My guess is that every importer to the U.S. is stuck in limbo right now, not knowing if they can even bring their products into the U.S. market. And of course, all of this ties up valuable cash.” The latter is bad news as many companies are currently cash strapped.
The tariffs that do ultimately get levied are going to be paid by American consumers in the end and thus only have an impact on relative competitiveness. Apart from China and India the novel U.S. tariffs range from 10% to 20%, so effects on supply chains are limited. But Tern’s Hon warns: “Doing business requires making long-term decisions and for this you need stability and predictability. Right now, we have the exact opposite. Fingers crossed that things get rationally worked out in the coming weeks.”